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Running The Numbers: eCommerce Advantages and Disadvantages

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eCommerce has never been more popular and launching an online store is one of the best ways to expand a business. 

There are plenty of advantages to eCommerce when compared with a brick-and-mortar store since online shopping can seriously expand your customer base.

That said, before you make the switch to eCommerce you need to consider the advantages and disadvantages of an eCommerce business. 

This way, you will know how to maximize opportunity and anticipate risk when doing business online. 

Top Ten Advantages of eCommerce

Having an online shop can bring many benefits to your business. 

There are plenty of great reasons to do eCommerce and if you haven’t created an online shop yet, I encourage you to start.

For my money, these are the main advantages of eCommerce:

1. Lower operational costs than offline stores

When it comes to weighing up the advantages and disadvantages of eCommerce, not all factors are created equal. 

And among the advantages, cost is king.

An online store won’t require you to pay rent, electric bills, or other maintenance fees. While you will still need to buy some services, like a web hosting plan and a domain name, the total cost will be much lower than running a physical store. 

Picking a website plan such as the Zyro eCommerce plan, will allow you to sell your products online for as little as $9.90/month

Zyro is great for beginners and all their plans come with free hosting and a subdomain, so you can publish your site right after you’re done customizing it. 

2. High margins if selling digital products

Selling digital products can be very profitable since the production costs remain the same no matter how many of them you sell.

By having your own online store, you won’t have to pay transaction fees for every sale you make, resulting in even more profit. 

3. Worldwide potential audience

Once you have your online store up and running, it’s available for everyone around the world to see, all anyone needs to buy from you is an internet connection and a credit card. 

Whether you sell physical or digital products, there is always a possibility that your next customer will come from another country or continent. 

What’s more, selling products worldwide is now much easier thanks to the many reputable payment and shipping services on the market. 

You can accept foreign currencies and deliver the order internationally without breaking a sweat. 

4. Your online business is open 24/7

Your eCommerce store will be accessible all day, allowing people to shop 24/7 regardless of where they live.

Even if you can’t process their order immediately, your customers will still be able to browse through your store and make a purchase. 

5. Customers are buying and spending more every year

It’s predicted that around 2.14 billion people globally will shop online in 2021. And the total amount of money spent on eCommerce is on the rise with studies actually showing that it is increasing every year

Obviously, it doesn’t take too much thought to realize that your business model would be missing out on a lot of potential revenue by not trying to take advantage of online shopping. 

Launching an eCommerce business can be the difference between gaining new customers and losing them to your competition. For many businesses, the ability to target prospective customers with online advertising has resulted in skyrocketing sales numbers. 

6. An eCommerce site is easy to optimize

Scaling up your online business is easy, especially when you are using a website builder. You can do so on your own without the need for prior knowledge of coding or design. 

If you need your site to be able to handle higher volumes of traffic, most website builders will allow you to simply upgrade to a bigger plan. 

For example, at Zyro, one of the most affordable website builders on the market – their basic eCommerce plan is $9.90 per month for a small business but as soon as you need to scale up you can switch to eCommerce +, capable of handling unlimited traffic for just $14.90 per month.

What’s more, with a website builder, changing the site’s look is just as easy with plenty of beautiful web templates to choose from.

You also have the option to display reviews and user testimonials to appeal to new customers. 

7. It’s much easier to grow and expand than offline retail

In terms of advantages and disadvantages, one thing that eCommerce has over traditional retail is the growth potential.

Unlike a physical store, an eCommerce site is not limited by its physical location. It lets you add as many products as possible without worrying about space limitations.

It also eliminates the need to rent a building or hire more people to reach customers outside your region. Supporting local language and delivery options would be enough to appeal to them. 

What’s more, the surplus money can be allocated to something more substantial, such as expanding your product inventory or optimizing the website further.  

8. Easy and cost-efficient to outsource work

If you want to improve your website but don’t have the skills to do it, there are lots of freelancers and agencies to choose from. 

From providing promotional images to making an overhaul to your website, you can easily find the right person for the job online. Hiring costs are also relatively diverse, allowing you to make a choice based on your budget. 

9. Advanced marketing resources at a low price

Today, digital marketing resources are not only accessible but also affordable and easy to implement. As such, running a one-person business has become easier than ever. 

One of the best examples of this can be seen in online advertising. 

From social media to Adwords, you will be able to handle advertising your self without the help of an agency or expensive placements. 

You can promote your store on search engines, Facebook, Instagram and more to get targeted access to millions of prospective customers each and every day. 

10. Adapt quickly to changes in demand

Like any other business, you will need to do constant research to keep up with the market’s demands. Thankfully, market research for an online business is relatively easy and quick to carry out. 

One of the most popular methods is keyword research. It allows you to learn about the current trends in the industry, giving you insight into what customers might need or want.

Another way to discover a trend is through social media platforms. By paying attention to online discussions, you’re likely to find new opportunities worth targeting.  

You can then monitor your website traffic and marketing campaigns using web analytics tools that will allow you to make data-driven decisions to improve your business. 

Four Biggest Disadvantages of eCommerce

Of course, there are always disadvantages to every business model, both online and offline and here we will discuss the disadvantages of eCommerce. 

Although I believe that eCommerce is the best option for expanding your business – learning the risks beforehand will allow you to respond appropriately to any problem that you might face in the future. 

1. You have to set up an efficient shipping strategy 

Shipping is an essential part of an eCommerce business. There are many aspects you need to take into account, such as:

  • Shipping rate. You have to choose between a free, flat, or table rate shipping model.
  • Packaging. Pick between a free packaging or order a custom one for your brand.
  • Delivery company. What kind of service you’ll use will impact the company’s overall shipping operations and management.
  • International shipping. You have to prepare the necessary documents and determine who will pay the duties and taxes.
  • Return shipping. Decide who will compensate for the return shipping cost should customers want to refund their purchase.

Implementing the wrong shipping strategy can harm your business. On the one hand, you might lose customers if you charge expensive delivery fees. However, failing to make profits due to covering all the shipping costs can negatively affect your business’ growth just the same. 

If you want to avoid such problems, be sure to calculate every possible cost that may occur and offer customers a transparent shipping procedure on your website. 

2. eCommerce store’s uptime, security, and fraud protection are vital

One of the hardest parts of launching an online business is to pick a hosting provider that can make sure your business is secure and available all the time. 

Choose a website provider that can actually guarantee these things as customers will not come back after a bad experience. Zyro, like many other providers, has a 99.99% uptime guarantee and a free SSL certificate included with all eCommerce plans. 

3. Higher number of returns than offline businesses

Since customers cannot try your products directly, you have to be ready to accept product returns. 

To maintain an excellent shopping experience for your customers, your store needs to have a return policy. Make sure it clearly spells out exactly what your customers can expect from you in terms of the procedures and the requirements for returns.

4. Highly competitive

There are thousands of online stores on the Internet, which may make it challenging for new businesses to stand out.

That said, don’t let the competition discourage you from launching your own online business. 

Focus on providing high-quality products and excellent service from the get-go. With the right marketing plans, your business will gain traction much more quickly. 

Written by

Author avatar

Damien

Damien is a self-professed, semi-obsessed word-freak that wants nothing more than to tell small-business stories in a big way. Always scouring the market to find the right tools for the job, he is focused on finding creative ways to bring them to the people. When not writing, Damien is known to be a massive music bore, amateur radio enthusiast, and woodland wanderer.

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